Back to Basics
Reflections of a Former Minister for Industrial Relations
The Hon Ian Viner Q.C.
The title for this keynote address is one which can
capture a variety of moods---as contemplative as reflections
in an afternoon light, as assertive as a self-portrait
seen through the mirror of politics, as contemporary
as the urgency of today's industrial relations issues
or as distinct as the horizon of the perfect industrial
Mr President---thank you for the invitation to deliver
the keynote address for the 'Back To Basics' Conference
of the H R Nicholls Society. I regard it as a privilege
to be here, so early in the life of the Society, for
I firmly believe the affairs of the Society will command
increasing attention and increasing acceptance by Australian
Society as the years pass by.
Your purpose is honorable, though you will be assailed
with accusations of the most vile of motives.
Your arguments are powerful, so powerful forces will
be arraigned against you each time you raise your voice
or set pen to paper or face the people through the
television screens of the nation.
Your ideas are pervasive, though politicians will
be afraid to act on them for fear of disturbing the
political scene and practitioners of the industrial
relations kind will put in your path every obstacle
they can find for fear that their entrenched bureaucracies
will be overthrown.
Mr President, members of the Society have already
shown they are undaunted in pursuing their cause, as
undaunted as H R Nicholls himself.
Industrial relations have always been at the heart
of politics, of political power and influence, of great
social causes, of the underlying nature of a country's
political economy and the ultimate well-being of its
workforce. That is why the perspective of change in
industrial relations is an historical perspective of
political and social change. In law and politics, climactic
events in England 150 years ago revolving around workers
acting in combination are still recalled in debate
and decision-making; we are also reminded that the
votes of two men 90 years ago changed the course of
Australian constitutional law and the politics of the
new nation through inclusion of the Commonwealth's
industrial power in placitum 35 of section 51 of the
Not so long ago in English legal and social history---only a couple of hundred years---profound change
occurred through what has been referred to as the movement
(in law) from status to contract in the relations of
master and servant.
Paul Johnson has observed that an aspect of the same
profound change has recently been taking place in Britain
under Margaret Thatcher. The monopoly power of modern
unions over the working lives of British men and women
has been broken down by laws sweeping away status as
a union member as the predeterminant of the right to
work and continue in employment. Individuals can now
act in their own interests, in business or employment,
without being trammelled by consideration of status.
Surely an egalitarian development!
After nearly 100 years, union immunity from the common
law is being cast aside in Britain. The long legal
march by Lord Denning has been joined by a committed
political leader, to assert and uphold the common law
rights of the individual.
Against a background of 83 years of an arbitration
system based on status, union monopoly and immunity
from the law, where does Australia stand?
One of those two men largely responsible for our Constitution
including the Commonwealth's industrial power was Henry
Bournes Higgins, the father of comparative wage justice
and author of the Harvester Judgment, who saw in the
system of compulsory arbitration in which strikes and
lockouts were outlawed a new province of law and order.
He was a man revered or reviled according to one's
perspective on industrial or economic reality. By any
standard the new province has failed. As I commented
as Minister, we are now experiencing the rule of no-law.
Order is turned on or off at the whim of the unions.
Unions were at first suspicious of this new institution---the Arbitration Court---but then quickly learned
that it gave them monopoly rights to organise labour
and an increasing supremacy of bargaining power over
The 'conveniently belong' principle of the Act of
1904 was extended and applied to preserve the exclusive
coverage of a union once registered. Room for creation
of new unions to reflect the changing structure of
industry was virtually closed off. Room for the un-unionised
enterprise was precluded. Preference to unionists,
originally provided in an altruistic way, gradually
assumed the hallmarks of compulsory unionism notwithstanding
being found unconstitutional by the High Court. The
soft option of conscientious objection was later taken
as an alternative to individual rights. Voluntary unionism
was anathema to the union movement's philosophy of
The early respect for arbitration and the responsibilities
which registration as an organisation under the Act
carried gave way over time to contempt for the sanctions
and penalties of the Act. The culmination in the Clarrie
O'Shea case was to make such sanctions and penalties
a dead letter of the law. No one was more active in
this purpose than the present Prime Minister when President
of the ACTU.
It is interesting to recall the basics of the original
compulsory arbitration system---a system with high
ideals of which the President was required by the Act
to be a Justice of the High Court. The Court was given
power to prevent, settle, mediate and determine disputes,
prescribe a minimum rate of wages or remuneration,
apply penalties and issue process, execute against
property and disqualify persons from membership or
office for breaking the law.
Preference was to be denied to any union whose rules
or decisions permitted the use of its funds for political
purposes or which required its members to do anything
of a political character!
Voluntary agreements could be made to settle disputes,
needing only simple registration with the Court to
be binding and enforceable by fixed monetary penalty.
No requirement then to pass a public interest test!
No basic wage, total wage, national wage, indexation
or second tier!
A system born in a different age of ideas and national
industrial structure; a creature of the Constitution
but not created by the Constitution; a system created
by Parliament which could be disbanded by Parliament
tomorrow and something different created in its place,
as I pointed out in a speech entitled 'The Americanisation
of Australian Labour Relations' in November 1981.
Almost without exception, every fundamental precept
on which the new province of law and order was erected
at the turn of the century has been whittled away---
some might say brutalised and demolished---to the point
that the Australian system of conciliation and arbitration
which so many today declare to be unique and inviolate
is incapable of recognition as the system which Henry
Bournes Higgins himself voted to include in the Constitution.
The restraints on the liberties of Australians were
severe enough under the original system. They have
been compounded by the increasing concentration of
power in the Commission and unions over the 80 years
of the system's life, as David Kemp's compelling paper
'Trade Unions and Liberty' shows.
Thankfully the availability and use of section 45D
of the Trade Practices Act and renewed awareness that
common law remedies can be used against unions in Australia
have started to redress the balance and restore some
of those liberties. When I wrote into the Coalition
Industrial Relations Policy in 1975 that engaging in
secondary boycott activity was an unfair labour practice,
I don't think too many people understood the potential
impact it could have on union power. Those who had
read Lord Denning's judgments would have understood.
When I opened an address to the 1973 Western Australian
Law Summer School by saying 'the availability of civil
law remedies to those hurt by industrial conflict has
been one of the forgotten areas of Australian law'
and forecast that 'with the weakening, if not breakdown
of these statutory systems [of industrial law] in recent
years, we could well witness employers and individuals
hurt by industrial pressure tactics increasingly turn
to the civil courts', few were prepared to act on that
point of view. Fifteen years later Mudginberri and
Dollar Sweets are by-words for the resurgence of the
common law and Peter Costello's paper on 'Legal Remedies
against Trade Union Conduct in Australia', delivered
to your 1986 Inaugural Seminar, will be more widely
read than mine.
Where, in the beginning, the Arbitration Court's role
was the somewhat mechanistic though equitable one of
preventing and settling interstate disputes by award
or receiving voluntary agreements, today the Commission's
influence over the economy matches even that of the
Government itself. Through the importance of national
wage cases and the techniques developed by Federal
unions to endlessly rope in employer after employer,
the Commonwealth Conciliation and Arbitration Commission
has attained pre-eminent power and influence over industrial
relations in Australia. Probably no other institution
in any other country (certainly no institution outside
Parliament in any Western Democracy) has achieved or
has been established to exercise such profound influence
over the relations of employers and employees and hence
over the economic life of a nation.
As observed by the Senate Select Committee on Industrial
Relations Legislation (October 1982): 'Its [the Commission's]
wage decisions are as significant for the nation as
the many economic and monetary decisions emanating
from the federal government'.
It might properly be observed that under the Accords,
since 1983, the Commission's decisions have acquired
an even greater significance because, under the unity
of approach of the Hawke Labor Government and the ACTU,
wage, superannuation and other outcomes for the Australian
workforce are concentrated even more in the hands of
The Accord, at its birth in 1983, was a statement
of principles of political economy by the union movement
and its political wing, the Australian Labor Party,
designed to serve their purposes and their social philosophy.
These parties then sought to put those principles into
effect through the Commission and their control of
I was appalled at the time at the obeisant acquiescence
of many leading employers and their industrial relations
representatives to the Accord. I applauded the seemingly
lone voice of Hugh Morgan against it at the Economic
The point has been reached now where the ACTU says
with apparent impunity and acquiescence by the Government
that unless the Commission does its bidding the ACTU
will walk out of the system.
Mr Justice Madden may yet turn out to be the ACTU's
Sir John Kerr.
At the same time as the Accord has gone through its
various 'Marks', the philosophy of corporatism, (in
the name of ILO-sponsored 'tripartism') has been fostered
by the Government, the ACTU and the Confederation of
Australian Industry; and acquiesced in by the Commission.
The ACTU and the Confederation seek, and are accorded,
virtually sole representative rights as the peak representative
bodies of the workforce and employers.
The move to corporatism is, in my view, plainly wrong.
Institutionalising the peak bodies as the supreme representative
parties before the Commission is the antithesis of
the very system to which those bodies owe their birth---the antithesis of principles of voluntary association,
of the rights of individuals as employees and employers,
and of freedom of contract.
Australian industry is today more diversely based
than it was in 1904, particularly with the growth of
service industries, the impact of technology and the
lessened role of manufacturing. There is every reason
for other representative bodies of employers like the
National Farmers' Federation, the Business Council
of Australia, the Australian Chamber of Commerce, and
the Small Business Association and other national or
sectional employer groups to be given equal standing
before the Commission---and no less in national wage
cases than on other issues. It was a stance encouraged
by me as Minister, no doubt to the chagrin of the Confederation,
which has happily progressed over the last five years.
But the corporatist mood is reflective of the increasing
effort by the ACTU to maintain centralised wage fixing
as a means of maintaining its supremacy in policy and
bargaining over the employers.
Ironically, the employers' victory in achieving a
total wage in the 1960s has led inexorably to the supremacy
of the ACTU before the Commission in national wage
cases and the dominance of the centralised wage-fixing
I cannot see the Confederation winning the productivity
argument in national wage cases in the foreseeable
Employers and, paradoxically, unions (as distinct
from the Confederation and the ACTU) would be better
off under a decentralised approach. Some might say
I am simply riding my hobby-horse of Ministerial times
following the breakdown of indexation in 1981; yet
a coherent system of wage fixing by award or voluntary
binding agreement can be built upon a decentralised
approach without destroying or abandoning the Commission.
I was not alone in my views then. The Treasury Department
of the day supported them.
The employers lost a great opportunity to bring about
change to their advantage and win the productivity
argument by not following through the 1982 national
wage case decision rejecting the ACTU's claim in which
the Commission left the door open for adoption of a
decentralised approach. Such an approach would have
fitted so much more efficiently into the deregulated
economic environment which was then beginning and has
since swept the world and Australia.
It would have been a significant step---a catalyst
for rapid structural change towards producing the flexible
labour market acknowledged by most commentators today
as being required to make Australian industry really
competitive with the world. The arguments of the Hancock
Committee of Review against a decentralised system
are shallow and unconvincing; in fact, they fly in
the face of many of the current pressures and practices
spreading across the labour market in the direction
of industry---and plant-level bargaining. I found it
ironic to hear an industry leader, publicly antagonistic
to changing the arbitration system, recently say privately
that he would prefer to have an industry union and
plant-level bargaining along American lines!
Even more ironic was to hear a Vice President of the
ACTU, Bill Mansfield, say that a high priority has
to be given to change of union structures in today's
economic conditions; that the multiplicity of craft-based
unions has produced 'horrific results' over the last
80 years and that there is a need for 'rationalisation'
of union structures in favour of industry-based unions.
What a sight to see the ACTU attacking its own sacred
cows! My mind wandered for a moment back in time, like
Dr Who, to 1982 and the vehement denunciation of my
proposals for industry-based unions. Time changes all
things. But this observation provides an insight into
the thinking which has produced Australia Reconstructed
by the ACTU and its proposals for 20 industry-based
If I am not mistaken, the ACTU is way ahead of the
employers in planning the restructuring of the labour
market as it wants it on centralised wage-fixing lines
to match the Hawke Government's planned restructuring
of industry as a priority of its current term in office.
Even a Robe River might not be able to withstand the
onslaught of 20 mega unions, with a monopoly of union
representation under the Conciliation and Arbitration
Act, dictating wages and conditions and work practices
on the basis of a centralised wage-fixing system.
Recently I heard a leader of an employer organisation
accept the need for industry unions and acknowledge
that enterprise unions were (at least today rather
than yesterday) a logical development in industrial
relations but that their achievement was not 'realistic'.
Aha, I thought, employers have moved one short step
onto the industrial landscape---a giant step for Australia
from the days of 1982. Ian Viner is half redeemed!
Why is it not realistic for management and workforce
in an enterprise or plant to bargain their own labour
contract? Many have bargained their own second-tier
work practices agreement? Is industrial lateral thinking
amongst employers so narrow and cave-like that it cannot
comprehend the benefits of achieving an identity of
Have any of these employers or their organisations
ever tried to open up dialogue with their own workforce?
Has the Confederation ever thought that the battle
it hasn't won before the Commission at national wage
level can be won across the face of Australian industry
in a multitude of work places by management and their
employees coming together to reach their own agreement
instead of waiting on the rhetoric, grandstanding and
erudition of parties before the Commission. Can such
ideas be so wrong when they are practised by the two
most powerful economies in the world and when the historical
birthplace of Australia's unionism has moved from status
to contract, the rule of law and the freedom of the
It is often argued that changing the law will not
change the attitudes of industrial relations participants
or practitioners. That is simply incorrect as the whole
of history will testify, not the least those laws of
England which entrenched our basic liberties.
Then again it is said (by employers) that other heads
of Commonwealth constitutional power should not be
used in industrial matters to bring about change. I
do not agree. The Hancock Committee describes the corporations
power as 'exotic'. That can only be a view born of
ignorance or prejudice. The trade and commerce powers,
the corporations power and other heads of power in
section 51 are, I believe, available by themselves
or complementary to the industrial relations power
to build structures which will create a flexible labour
market, introduce greater efficiency into the economy
and provide the Commonwealth with a better basis to
manage the key elements of the economy.
In the end, the Commission only has the powers and
duties granted to it by the Commonwealth Parliament
and, as I foreshadowed as early as the first Constitutional
Convention in 1973, 'the trade and commerce power and
the corporations power have barely been tapped and
their extent is limited only by the limitations that
we place upon our concept of them'.
My somewhat heretical speech as Minister on 'The Americanisation
of Australian Labour Relations' expresses my views
on the Constitution. I would add an update.
It would indeed be the supreme irony to resort to
the external affairs power of the Commonwealth, involving
the Covenants and Declarations of the ILO and the United
Nations to legislate all the desirable changes to our
industrial relations system!
I believe there is an urgency about the task facing
employers and individual members of the workforce in
coping with the changes which theACTU is intent on
introducing to restructure industry and restructure
the shape of Australian unions. There is also an urgency
facing politicians opposed to the Labor Government
to address these issues and commit themselves to action
Mr President, your Society has a commanding role in
changing attitudes and awakening people to the magnitude
of changes which could come by default.
Your values are sound. Your arguments are already
producing changed attitudes, practices and policies.
There has been a marked movement of opinion since
the days I was labelled a confrontationist because
I objected to strike-happy public service unions, argued
for a decentralised wage system and binding labour
contracts, legislated for voluntary unionism, damages
for breach of industrial law and industry-based unions,
and even dared to foreshadow legislating for employees
to exercise their right of voluntary association to
form their own enterprise union.
It is indeed a strange world we live in but one too
precious for us to stand idly by and let basic values
be eroded and, in some cases, destroyed.